A new money laundering scandal is revealed in the Emirates
The UAE witnessed a new money laundering scandal in light of the blatant government failure to establish binding rules that prevented the mitigation of the widespread phenomenon in the country.
Wise Nuqud Ltd, a money services company licensed in the UAE, was fined $360,000 (Dh1.32 million) for failing to follow anti-money laundering rules.
The Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) found that Wise had neither established nor maintained appropriate anti-money laundering systems, such as checking the source of funds or wealth for clients identified as high risk before undertaking transactions.
Instead, it only executed the checks when the account met the specified payment limit (and after it had already established a business relationship with those customers), ADGM said in a statement.
The regulator said it also failed to appropriately obtain approval from senior management to establish business relationships with a class of clients it identified as high risk.
The FSRA review did not identify any actual money laundering cases resulting from Wise’s anti-money laundering systems and control failures.
Emmanuel Jevanakis, CEO of FSRA, said: “The FSRA actively supports the national AML/CFT agenda and maintains a strong and comprehensive supervisory framework and enforcement system in the AML/CFT areas of ADGM.
The FSRA is committed to ensuring that all regulated entities maintain high standards for addressing money laundering risks, and where appropriate the Company will take robust action to ensure companies are fully compliant with ADGM’s anti-money laundering requirements.
Recently, a government document exposed senior officials in the UAE covering money laundering crimes as part of the corruption and illegal profit deals in the absence of legal deterrent measures, despite international condemnations of Abu Dhabi’s record.
The document entitled National Assessment of the Latent Risks of Money Laundering and Terrorist Financing in the United Arab Emirates is classified as strictly confidential and for internal use only.
According to the document, the total money laundering and terrorist financing activities investigated by law enforcement agencies in the UAE amounted to (159), but only (22) of them were referred to the Public Prosecution. These statistics can be found in Table 17 in the document.
The UAE national assessment of money laundering and terrorist financing risks includes eight main sections.
In it, important issues were addressed, such as mitigation measures in the United Arab Emirates regarding countering money laundering and combating the financing of terrorism.
It also discussed the methodology for assessing the inherent risks of money laundering and terrorist financing and evaluating the threats of money laundering and terrorist financing, the national context and potential weaknesses.
The document dealt with assessing sectoral weaknesses, the weaknesses of legal persons, and the potential risks of terrorist financing in non-profit associations.
At the end of the report came an appendix in which it was mentioned updated statistics related to the threats of money laundering and terrorist financing.
What is remarkable in the appendix is that from 2013 to 2018, 159 terrorist financing activities in the country were investigated.
The largest part of these activities is for the Emirates of Dubai and Abu Dhabi, but only (22) of them were sent to the Public Prosecution, according to the document.
